"Commonwealth Bank of Australia (CBA) and Westpac have been riding the local economy, riding the property market and have done particularly well," Lachlan Colquhoun, head of markets analysis at East and Partners, told CNBC. "Whether that will remain into next year; that's the big question."

"Australian banks have had a combined cash earnings of A$27.4 billion and 9.5 percent growth in cash earnings, which in this environment of soft credit growth is a very solid outcome," said Stuart Scoular, banking leader at PricewaterhouseCoopers.

Now the challenge is to maintain that strong earnings growth at a time when the prospect of monetary tightening is growing, analysts said.

The Reserve Bank of Australia has slashed rates by 200 basis points since late 2011 to a record low of 2.5 percent and many economists believe that the rate-cutting cycle is almost over as signs of strength in the economy grow.

Data on Monday for instance showed retail sales rose 0.8 percent in September from a month earlier, well above market expectations for a 0.3 percent rise.

"The key risk factors are a sharp rise in interest rates and or an increase in unemployment which would increase bad-debt expenses for the majors," said Scoular, talking about the risks to Australia's banks on CNBC Asia's "Cash Flow" on Monday.

Nathan Bell, research director at Intelligent Investor, added: "Valuations for the top four Australian banks are higher than at the time of the global financial crisis, there's no margin of safety at current values."

Still, analysts said signs of a pick-up in credit growth at businesses were a positive sign for the banking sector in the months ahead.

Annual Australian credit growth stands at 3.3 percent, down from 15 percent in 2007 and housing credit growth is at around 5 percent, down from 20 percent a decade ago, Reuters reported.

"All these [bank earnings] results have been driven by cost reductions, by bad debt reductions, they have not been driven by growth in business credit. So the issue going into 2014 could be whether we will see demand in business credit," said Colquhoun at East and Partners.

"We've seen some indications that with the election out of the way there's a bit of interest from businesses of all sizes to start borrowing again," he added, referring to Australian elections that took place in September.